SEOUL, Sept. 16 (Yonhap) — LG Chem Ltd., South Korea’s leading chemical company, will hold a board meeting this week to discuss a spinoff of its battery business, people familiar with the matter said Wednesday.
LG Chem could finalize its decision on the issue in an emergency board meeting on Thursday, they said.
The company said it could not confirm whether it will hold a board meeting and it will announce its decision through a regulatory filing in case of any changes.
In December, LG Chem said in a regulatory filing that it is mulling various strategic options to strengthen competitiveness of its battery business, though no specific decision was made.
The proposed spinoff comes after LG Chem’s battery business unit achieved an operating income of 155.5 billion won (US$132 million) in the second quarter on quarterly record sales of 2.82 trillion won.
LG Chem has said its battery business unit could continue to post sharp growth in the third quarter due to increased shipments of electric vehicle (EV) batteries to Europe and increased sales of cylindrical batteries.
LG Chem is a key supplier of batteries for electric vehicles, including those of GM, Ford, Renault, Volvo, Audi, Volkswagen and Daimler, as well as South Korea’s largest carmaker, Hyundai Motor Co., and its smaller affiliate, Kia Motors Corp.
LG Chem has said it is on track to boost its production capacity to 100 gigawatt hours by the end of this year, which is enough to supply batteries for about 1.7 million electric cars.
The company has also said its order backlog for EV batteries is currently valued at more than 150 trillion won.
The EV battery market has been on a roll as automakers around the world race to go electric and eco-friendly due to tightened regulations on greenhouse gas emissions, which scientists say are to blame for global warming.